European GMO ruling stems CRISPR patent pool efforts

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05 December 2018
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Patrick Wingrove, London

Plans for a CRISPR patent pool in the agricultural sector have been stifled by the ECJ's July ruling that crops derived from the technology are genetically modified organisms. In-house counsel say it has made those patents less valuable

The judgment that crops modified by CRISPR-Cas9 technologies are genetically modified organisms has halted efforts to establish a European CRISPR patent pool in the agricultural sector, according to in-house sources.

Agricultural businesses had started working together to establish a licensing platform for must-have, gene-editing technologies until the European Court of Justice ruled that organisms obtained by mutagenesis must be governed by the restrictive provisions of the EU GMO Directive.

“Having this licensing platform was a high priority before the ECJ ruling, but due to the uncertainties on commercialisation of plant varieties with genome editing under this new ruling in Europe, the urgency has decreased somewhat,” says Claudia Hallebach, head of legal affairs and IP at seed company KWS.

“Having this licensing platform was a high priority before the ECJ ruling, but due to the uncertainties on commercialisation of plant varieties with genome editing under this new ruling in Europe, the urgency has decreased somewhat”

Claudia Hallebach, KWS

She adds that her firm was actively promoting the idea with other CRISPR players in the agricultural space to enable unrestricted innovation for gene-edited crops. Although there are companies with larger portfolios of CRISPR-Cas9 patents, she says, even they would need access to patents surrounding the technology from both the agricultural and pharmaceutical sectors.

The pool would have operated in a similar manner to the sector’s International Licensing Platform, which offers licences for agricultural patents under fair, reasonable and non-discriminatory terms.

But the uncertainty and limitations that the ruling has imposed on CRISPR crop development has stifled the industry in Europe. It is not clear what the next steps are and whether the regulations in Europe will be lifted.

Hallebach says the concept of the licensing platform will remain relevant because genome editing technologies are not considered as ‘essentially biological processes’ and so are not prohibited by European patent law.

“Nevertheless it needs to be ensured that access to breeding material will not be blocked by patented genome-editing traits contained in plant varieties. Therefore a licensing platform, coming with a contractual breeder’s exemption, could provide a balanced solution in future,” she says.

The European Commission’s Scientific Advice Mechanism (SAM) Group of Chief Scientific Advisors mirrored Hallebach’s position on decreased CRISPR innovation as a result of this ruling, contending in a published statement that the EU must improve the regulatory environment for products of gene-editing or Europe would be left behind in the field.

GMO Directive governance stands to limit CRISPR crop commercialisation because products regulated by its provisions can only be released into the environment or put on the market after an environmental risk assessment and public consultation.

The directive also contains a safeguard clause in Article 23 that allows member states to restrict the use and sale of GMOs previously approved by the EU – and so even if a GMO product is authorised, states can opt out and restrict or ban a GMO product.

This opt-out provision has been used before, and it means the use of the older, random methods of mutagenesis is likely to be a safer bet than using CRISPR.

The ECJ went against the opinion given by Advocate General Bobek in January 2018, which said that organisms obtained by mutagenesis should be exempted from the GMO Directive.

European patents nipped in the bud

Part of the reason that a European CRISPR patent pool is less important is that because the ECJ ruling has stifled CRISPR innovation in agriculture, patents for the technology and derived products are less valuable, and fewer will be filed than previously expected.

The head of IP at a Netherlands-based food technology company says that European CRISPR patents will be less valuable because GMO classification will inevitably reduce demand for gene-edited products in certain jurisdictions.

“If a product is GMO, that rules out some customers and countries entirely, and that will affect the IP behind it”

“Demand for a food product is obviously very much dependant on what the final customer wants, which is why some things are marketed as natural or organic, for example. If a product is GMO, that rules out some customers and countries entirely, and that will affect the IP behind it.”

The IP director of a food tech business agrees with this view, and adds that her company is now on the fence on how involved it want to be in the technology.

“Many of the ingredients we make are sourced through natural strains but we are also investigating genetic engineering of strains because we see advantages in manipulating properties,” she says. “Depending on how this all turns out, we may want to change our level of activity in that space.”

Sources also explain that European vegetable seed companies traditionally have not used GMOs because the profit margins for modified vegetables is relatively low compared to the regulatory costs of producing them. One source says his company would have entered the CRISPR space had the ECJ not ruled the way it did, but is now very unlikely to.

“I do not know why you would patent something that you cannot bring to the market anyway,” he adds.

But the regulatory regime for CRISPR products is going down a more permissive path in places such as the US. Sources say they will likely seek appropriate global protection and patent designations, despite the regulatory decision.

“Although based in Europe, our business is a worldwide one,” the head of IP at a global seeds company points out. “We are still analysing the situation, but that fact will have a large bearing on our strategy.”

Jeroen Rouppe van der Voort, IP research manager at Enza Zaden, adds that companies developing CRISPR agricultural products elsewhere in the world would also likely have little difficulty selling them in Europe.

“Products developed in the US, for example, will go the European market and if they are declared non-GMO, they would be treated as a non-GMO because of treaties between the EU and US.”

He points out that the ruling ultimately cannot be enforced because the types of mutations generated by CRISPR also occur in nature, which means the technology does not leave a trace like those solutions traditionally used to produce GMOs.

As such, the ruling only stands to have the effect of limiting innovation and will likely fail to effectively regulate the distribution of CRISPR derived food products in Europe as it intended.

Future patentability?

The ruling from the ECJ does not affect patentability of CRISPR technologies or products because the GMO Directive is separate from the Biotech Directive and Article 53 of the European Patent Convention that provide exceptions to patentability in Europe.

The permanent working group on IP rights for the ALLEA (European Federation of Academies of Sciences and Humanities) considered whether there should be changes to the EU Biotech Directive in view of CRISPR-Cas9 technology in 2016.

“I do not know why you would patent something that you cannot bring to the market anyway”

It concluded that European patent law provided the necessary incentives for the successful development of CRISPR-Cas9 technologies while the EU Biotech Directive gave the necessary safeguards, and as such changes to patent law were not needed.

According to most in-house sources, the laws governing CRISPR patentability are likely to stay as they are – but not everyone is convinced. The IP director of a food tech business says she has doubts over the assertion that the ECJ’s ruling will not one day affect patentability.

“It may not happen in the next few years because we have just had this giant discussion around it – but I would not be surprised if it did affect patentability to some extent in the future,” she says.

She adds that she cannot imagine that EU lawmakers will leave patent law surrounding CRISPR intact if the situation stays as it is.